Watch Michael Acton Smith's full talk from Wired 2012

There's nothing wrong with failing as long as you fail fast and
if you make anything fun, you can radically change behaviour, said
Michael Acton Smith, founder of Mind Candy, speaking at Wired 2012.

Acton Smith described the "long, slow, painful" failure of his
alternate reality game called Perplex City, which he launched in 2004. It
involved a treasure hunt across multiple platforms, where multiple
players competed to win an £100,000 reward. "Creatively it's one of
the most extraordinary things I'd been involved in. Commercially it
was a disaster," he said.

Mind Candy had a "tiny bit of cash" left in the bank and so
Acton Smith decided on "one final roll of the dice one final
pivot". He had seen how children interacted with the web and wanted
to use this new canvas to create "extraordinary entertainment for
children". The result was Moshi Monsters, an online world where
children can adopt a monster and play with it, read stories, share
artwork and work through puzzles. "Kids love it as it's fun and
it's learning. We call it stealth education," said Acton Smith.

Within five years, Moshi Monsters has extended into a
multi-million pound empire, with toys, books, a cartoon and a movie
being planned for 2013. "We didn't know if it would work offline,
but it's been phenomenal. Last year we sold well over $100,000 of
Moshi products. IT will be a lot more this year.

He concluded: "Our ultimate vision is to create the greatest
entertainment company in the world for this digital generation of
kids."